South Africa to Turn to Nigeria for Oil Supply

Nigeria oil
Nigeria is Africa's largest oil producer

With the uncertainty over supply of oil from Iran, South Africa is looking to Nigeria to purchase its oil, the Deputy President Kgalema Motlanthe said, following the signing of a Memorandum of Agreement with the Vice President of Nigeria, Namadi Sambo, in Cape Town on Wednesday.

South Africa may be forced to comply with a US order to cease buying oil from Iran – from which it sources about a quarter of its oil – or risk economic penalties from America. The Minister of Energy Dipuo Peters last week said government would decide on its response to proposed sanctions by the end of this month.

Motlanthe said PetroSA and private traders were expected to look at supply agreements for oil from Nigeria. “We would guarantee going forward to our Nigerian brothers (that there will be) demand for their liquid fuel, because we don’t want to source our fuel in areas that are likely to be unstable.

“Indeed, we are quite confident that Nigeria will become one of our trusted suppliers of liquid fuel going forward,” he said.

Ready to offer support

Sambo said Nigeria was ready to offer any economic support – be it energy or otherwise.

Motlanthe said the agreement he signed with Sambo today would help prepare the way for a more enabling business environment between two of the continent’s biggest economies.

He said the agreement enabled both countries to rope in business people from both countries that had an idea for investment opportunities in both countries.

Nigerian companies with the wherewithal to supply infrastructure projects – including the supply of cement – would be invited to participate in South Africa’s massive infrastructure programme.

Bi-National Commission

Sambo arrived in South Africa on Monday at the invitation of Motlanthe to attend the 8th South Africa-Nigeria Bi-National Commission. He is expected to depart the country today.

The two discussed several issues and reviewed the progress made since the 7th Bi-National Commission was held in Abuja in 2008. They also discussed the progress made on the seven working groups of the Bi-National Commission.

These workings groups are: foreign affairs and co-operation; trade, industry and finance; security and defence; agriculture, water resources and environment; minerals and energy; public enterprises and infrastructure; and the social and technical working group.

Today, a Memorandum of Understanding on economic and technical co-operation was signed between Minister of Trade and Industry Rob Davies and Nigeria’s Finance Minister Olusegan Aganga.

Another Memorandum of Understanding was also signed between Aganga and the Minister of Finance Pravin Gordhan, to offer mutual assistance with customs administration between the two countries.

“Nigerians are happy about the way they are treated in South Africa,” he said, adding that there was a plan to expand the number of years for which travel visas can be used for, while doing away completely with diplomatic passports.